CIÉ's international tours division should be privatised, according to a framework plan for the break-up of the State transport group.
A report by consultants in PricewaterhouseCoopers (PwC) ruled out transferring ownership of CIÉ Tours into Bus Éireann or Iarnród Éireann. Instead, it said that the subsidiary should be put on the market in the travel trade or sold to a management group.
PwC said the tours business was non-core, but senior sources in the CIÉ companies expressed doubt that such a sale would proceed any time soon. Any arrangements for the transfer of tour bus drivers to the private sector are likely to prove difficult to negotiate.
The PwC report said Bus Éireann provided a fleet of 18 coaches with drivers to the tours company. "The preservation of this arrangement is important to the continuity of the CIÉ Tours coach tour business in Ireland," it said.
"Changes to this also have the potential to affect established agreements with the trade unions."
In both sale options, it said "continuity of employment and employment terms would also need to be considered". But this would be a "more significant issue" in a trade sale.
The Minister for Transport, Mr Brennan, is expected to form a special committee in the next fortnight to oversee implementation of the PwC report. While most of the report outlines administrative options for the break-up of the group, the possible divestiture of the tour company is also mooted.
The document estimated 2001 revenues in the subsidiary at €54.85 million, but said it had been hit "particularly hard" in 2001-2002 after the foot-and-mouth crisis and the September 11th attacks in the US. Some 74.9 per cent of revenues were derived in the US while 10.1 per cent were sourced in Germany. The remainder came from Ireland and Britain.
When the PwC report was presented to the Government last August, profits in 2001 were estimated to have fallen to €1 million from €2.6 million in 2000.
On a possible sale, PwC said it would be "essential that analysis to verify the financial viability of these options be undertaken".
It is not known whether the subsidiary's management team would be willing to consider a buy-out.
PwC said it would be crucial in any such scenario to operate the business on a stand-alone basis and replace any services currently provided by CIÉ. Ownership options for employees should also be considered in this scenario, it said.
